New Senior Announces Definitive Documentation for Internalization

Company’s Management Function Will Be Internalized as of January
1, 2019

November 20, 2018 06:33 AM Eastern Standard Time

NEW YORK--(BUSINESS WIRE)--New Senior Investment Group Inc. (“New Senior” or the “Company”) (NYSE:
SNR) announced today it has entered into a definitive agreement to
internalize the Company’s management function, effective as of January
1, 2019.

Strategic Review

As previously announced on February 23, 2018, the Company’s Board of
Directors (the “Board”), together with the Company’s management team and
legal and financial advisors, have been exploring a full range of
strategic alternatives to maximize shareholder value. The Board formed a
special committee (the “Special Committee”), composed entirely of
independent and disinterested directors, to address certain aspects of
the strategic review. In connection with the strategic review, the
Company retained J.P. Morgan Securities LLC as its financial advisor and
Skadden, Arps, Slate, Meagher & Flom LLP as its legal advisor. In
addition, the Special Committee retained Morgan Stanley & Co. LLC as its
independent financial advisor and Wachtell, Lipton, Rosen & Katz as its
independent legal advisor.

The strategic review has been a multi-step process, resulting in the
following previously announced initiatives: (1) the termination of
triple net leases and entry into new management agreements for 51 IL
Assets in May 2018, (2) a re-set of the Company’s dividend in August
2018, (3) the $720 million refinancing completed on October 10, 2018 and
(4) an agreement in principle reached in August 2018 to internalize the
Company’s management function, subject to the completion of definitive
documentation.

On November 19, 2018, the Company and the Manager formalized the
agreement in principle to internalize the Company’s management function
with the entry into a Termination and Cooperation Agreement (the
“Termination and Cooperation Agreement”).

Termination and Cooperation Agreement

Currently, the Company is externally managed by FIG LLC (the “Manager”),
an affiliate of Fortress Investment Group LLC, subject to oversight by
the Board, pursuant to a Management and Advisory Agreement, dated
November 6, 2014 (the “Management Agreement”). In accordance with the
Management Agreement, the Manager provides the Company with a management
team, other personnel and corporate infrastructure. Accordingly, all of
the individuals who provide services to the Company are currently
employees of the Manager. In exchange for the Manager’s services, the
Company pays the Manager certain fees, including a management fee and,
subject to performance, an incentive fee. The Company also reimburses
the Manager for certain costs.

Under the Termination and Cooperation Agreement, the parties have agreed
to terminate the Management Agreement effective as of January 1, 2019.
In consideration for the termination of the Management Agreement prior
to the end of its term, the Company will (i) make a one-time cash
payment of $10 million to the Manager and (ii) issue to the Manager
400,000 shares of the Company’s newly created Series A Cumulative
Perpetual Preferred Stock, which will have a liquidation preference
amount of $100 per share and pay a cumulative quarterly cash dividend at
a rate of 6.0% per year (the “Preferred Stock”). The Preferred Stock
will be redeemable by the Company at any time. In addition, the Manager
will have the right to require the Company to redeem 50% of the
Preferred Stock beginning at the end of 2020, and the other 50%
beginning at the end of 2021.

As a result of the termination of the Management Agreement, the Company
will cease to be externally managed, and the Company will become the
employer of its officers and employees. Susan Givens has accepted an
offer of employment to remain as the Company’s Chief Executive Officer,
and the post-internalization management team is expected to include
several individuals who currently are employees of the Manager and serve
in key roles at the Company. In addition, the Manager is expected to
continue to provide certain services (at cost) for a transition period,
pursuant to a transition services agreement.

Expected Benefits of the Internalization

The internalization is expected to have the following key benefits:

Cost-Savings. The Company estimates that the internalization
will result in a reduction in general and administrative expenses of
approximately $10 million per year.

Simplicity and Transparency. The internalization is expected to
simplify the Company’s organizational structure and increase the
transparency of its financial results.

Expanded Institutional Ownership. New Senior’s institutional
ownership base could expand as a result of increased comparability
with its peers in the healthcare REIT sector.

The internalization is one of several types of transactions that were
given thorough consideration by the Board and the Special Committee
during the course of the strategic review. Having considered a range of
alternatives, the Board and the Special Committee believe that
internalizing the Company’s management function will provide the
greatest opportunity to maximize value for shareholders.

ABOUT NEW SENIOR

New Senior Investment Group Inc. (NYSE: SNR) is a publicly-traded real
estate investment trust with a diversified portfolio of senior housing
properties located across the United States. As of September 30, 2018,
New Senior is one of the largest owners of senior housing properties,
with 133 properties across 37 states. New Senior is managed by an
affiliate of Fortress Investment Group LLC, a global investment
management firm. More information about New Senior can be found at www.newseniorinv.com.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS

Certain information in this press release may constitute
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995, including without limitation
statements regarding the expected internalization of the Company’s
management, including with respect to the potential costs and benefits,
and the expected completion, thereof. These statements are not
historical facts. They represent current expectations regarding future
events and are subject to a number of risks and uncertainties, many of
which are beyond our control, that could cause actual results to differ
materially from those described in the forward-looking statements. These
risks and uncertainties include, but are not limited to, risks and
uncertainties relating to the Company’s ability to successfully manage
the transition to self-management. Accordingly, you should not place
undue reliance on any forward-looking statements contained herein. For a
discussion of these and other risks and important factors that could
affect such forward-looking statements, see the sections entitled “Risk
Factors” and “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” in the Company’s most recent annual
and quarterly reports filed with the Securities and Exchange Commission,
which are available on the Company’s website (www.newseniorinv.com).
New risks and uncertainties emerge from time to time, and it is not
possible for New Senior to predict or assess the impact of every factor
that may cause its actual results to differ materially from those
contained in any forward-looking statements. Forward-looking statements
contained herein speak only as of the date of this press release, and
New Senior expressly disclaims any obligation to release publicly any
updates or revisions to any forward-looking statements contained herein
to reflect any change in New Senior's expectations with regard thereto
or change in events, conditions or circumstances on which any statement
is based.